Portugal’s Bonds Rally as Systemic Risks to Europe Seen as Low

Portugal’s bonds rose and led a rally among Europe’s higher-yielding government bonds, as Bank of America Merrill Lynch said systemic risks for Europe from the nation’s banking woes were limited.

Ten-year Portuguese securities snapped a four-day decline that pushed up yields this week by the most since 2013 as a company associated with the country’s second-biggest bank, Banco Espirito Santo SA, missed some debt payments. That helped spark a selloff from Spain to Greece, with yields on German 10-year bonds, perceived to be among the safest in the region, dropping to the lowest in more than 14 months. BofAML said European Central Bank provisions would prevent contagion.